During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be depreciated over that period by the straight-line method. At 1 July 2019, all six criteria to capitalise development costs were fully safisified. Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020? A. $300,000 B. $320,000 C. $100,000 D. $400,000
During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be depreciated over that period by the straight-line method. At 1 July 2019, all six criteria to capitalise development costs were fully safisified. Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020? A. $300,000 B. $320,000 C. $100,000 D. $400,000
Chapter7: Deductions And Losses: Certain Business Expenses And Losses
Section: Chapter Questions
Problem 28CE
Related questions
Question
During the year ended 30 June 2020, Emily Ltd spent $300,000 on the development of a new range of garden machinery. In order to carry out this work, Emily purchases some highly specialized equipment, on 1 July 2019 at a cost of $100,000. The equipment is expected to have a useful life of five years and is to be
Required: According to HKAS 38 ‘Intangible Assets’, what is the maximum amount that Emily can carry forward as development costs as at 30 June 2020?
| A. |
$300,000 |
|
| B. |
$320,000 |
|
| C. |
$100,000 |
|
| D. |
$400,000 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College